Published on June 27th, 2024 by Felix Martinez
High-yield stocks are a valuable asset for investors looking to boost their income, especially in retirement. These stocks pay dividends that are significantly higher than the market average, with the S&P 500 currently yielding approximately 1.2%. For example, a $120,000 investment in stocks with an average dividend yield of 5% can generate an average of $500 a month in dividends.
To help investors identify high-yield stocks, we have compiled a list of securities, including REITs and MLPs, with dividend yields of 5% or more. You can download the full list, which includes important financial metrics like dividend yield and payout ratio, by clicking on the link provided.
One of the high-dividend stocks on our list is Organon & Co. (OGN), part of our ‘High Dividend 50’ series that covers the 50 highest-yielding stocks in the Sure Analysis Research Database.
Organon & Co. is a global healthcare company focused on improving women’s health and well-being. Established in 2021 as a spinoff from Merck & Co. (MRK), Organon offers a wide range of healthcare solutions, including contraceptives, fertility treatments, and established medicines. The company operates in over 140 countries, leveraging its expertise in women’s health to address unmet medical needs.
In the first quarter of 2024, Organon reported a revenue of $1,622 million, a 5% increase from the same period in 2023. The company’s diluted earnings per share were $0.78, with adjusted diluted earnings per share at $1.22. Organon reaffirmed its full-year 2024 financial guidance, citing strong performance in key segments like Women’s Health, Biosimilars, and Established Brands.
With a focus on expanding its women’s health portfolio and biosimilars segment, Organon is well-positioned for growth. The company’s global reach and strategic partnerships offer opportunities for market expansion, particularly in emerging markets. By investing in innovative solutions and regulatory approvals for new biosimilars, Organon aims to drive sustainable long-term growth.
During economic recessions, Organon’s essential healthcare products and focus on cost-effective biosimilars provide stability in revenue streams. The company’s current annual dividend of $1.12 per share, with a high yield of 5.4%, reflects its commitment to shareholder returns.
In conclusion, Organon & Co.’s specialized focus on women’s health, diverse product portfolio, and strategic growth initiatives position it as a strong contender in the high-yield stock market. Investors can expect continued growth and stability from this innovative healthcare company. The company is expected to pay out approximately 25% of its earnings per share (EPS) to shareholders in dividends. The dividend seems sustainable, and it is projected to grow at a rate of 2% in the future. This makes OGN stock an attractive option for investors who prioritize income.
Organon is forecasted to deliver an annual return of 9.3% through 2029. This expected return is based on an earnings growth rate of 3%, a starting dividend yield of 5.37%, and a slight contribution from multiple expansion. The stock has seen an increase of more than 80% in the last two reports.
Given the projected returns, we rate Organon as a hold. The stock is particularly appealing to income investors due to its high dividend yield and low payout ratio.
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